City of Toledo active with Southwyck development

Though still early in the process, the City of Toledo now has fewer than 120 days in which to market its recently purchased 58 acres at the site of the former Southwyck Mall along Reynolds Road in South Toledo.

Spokesperson Lisa Ward said the city is “not making public any information on calls or contacts concerning the property,” yet there is much at stake between now and mid-November. Southwyck’s location remains relevant and strategic, situated near the Ohio Turnpike and I-475, and still has a strong commercial and residential mix in the surrounding area.

“It’s an important site, in an important section of town,” said Larry Dillin, president of Dillin Corp., a developer who once attempted to revitalize the site until the banking environment took a downturn in 2008. “I think it’s potentially a good location and with new investment, because new investment brings more investment.”

Photo by Shawn Rames / Exploring Northwest Ohio from the Sky

The 120 days is a “due diligence period” whereby the City can do their own investigation and homework of the property — much in the same way any citizen might investigate a home purchase, according to Matt Sapara, director of the city’s department of development.

“We had a very good deal that’s very fair,” Sapara said. “We need to be very good stewards of the public funds. We take this very serious, and it’s a good deal to the Mayor.”

Right now the city is “marketing the heck out of it,” Sapara said. “We have already had a couple of discussions since last Monday.” When day 121 arrives, the city must then commit and will have 30 days to finalize the sale. Any time prior to this, the city may back out of the deal.

Two conceptual drawings for possible future development on the site were revealed July 20, but those were merely ideas, and its eventual use remains an unknown.

“The city is open to the needs of businesses interested in this property,” Ward said. “We have not defined a specific preferred use.”

The city has spent more than $7 million to update the infrastructure surrounding the mall, including a landscaped and redeveloped Rey-nolds Road and a rebuilt Southwyck Boulevard. It will also spend $434,000 to raze the former Clarion Hotel.

Private investment in the area is significant.

A total of $29.5 million has been spent among several ventures, some who were around during Southwyck’s tenure, and others who are new: Maumee Valley Country Day School, Lyden Oil, At Home superstore and Genesis Village.

Many businesses near Southwyck “have expressed support of our action,” Ward said.

“We’ve had many in the community reach out to us and tell us they’re glad we’re taking an aggressive stance, rather than hoping others do it on their own,” Sapara said.

“We’re all excited because our location is just a dying location,” said Shana Bryant, Goodwill assistant manager, whose store is situated directly across from the former mall property. “If they do bring in something really nice it would bring more business around here.”

Nearby residents also express hope that the city can attract another positive force onto the land that once housed one of Toledo’s most popular malls.

“I’m pretty excited,” said Mary Witt, who lives not far from the site in Maumee. “I’m hoping it will be something that will bring business to the area. Personally, I don’t think we need office buildings. We have those all around the (Southwyck Boulevard.) circle and many of them are empty.”

For now, Sapara said the city will continue to seek tenants.

“I think people are very, very happy that they’re seeing an aggressive approach by the city,” he said.

Higgins: Toledo, Ohio: Real estate entrepreneur

When the story broke that the City of Toledo might become its own landlord, I immediately offered my services to Toledo Free Press Editor in Chief Michael Miller:

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“Permit me the time to carefully gather and analyze the facts and figures involved with this situation and I will deliver to you the finest effort that I’ve ever done for the Toledo Free Press.”

Sure, setting the bar this low makes the goal far too easily attainable, but I could not let that deter me.

I spent countless hours over endless columns of figures that made little sense to me and would likely have made the most dedicated IRS auditor catatonic. I tirelessly dedicated myself to interpreting market trends that even Donald Trump would find all but impossible to decipher.

Half blind from lack of sleep, nerves jumbled from too much time attempting to live on a diet of coffee and Snickers bars, and terrified by the implications of the material that I had thus far digested, the answer struck me in the wee hours of the morning when I least expected it, like the lightning bolt that struck the jackass in “Sergeant York” (which seemed a strangely appropriate metaphor).

Of course the city should not be permitted to become its own real estate agent and purchase One Government Center. The logic was as simple as it was brilliant; the reasoning as inarguable as it was definitive.

Oh, it was not about decades that showed an unblemished record of abject failure in real estate market speculation under every administration in Glass City history. Such a conclusion could be reached almost intuitively, and a more satisfactory form of closure was required. Speaking of history and failure, however, neither was it about the State of Ohio’s documented history of minimal maintenance over the 30-year-plus history of the building that had likely aged this 22-story structure far beyond its years and likely put it in a state of disrepair likely to create one of those “catastrophic and unrecoverable spins” a la Tom Cruise “Top Gun.” (Similar personal experience in the case of my own structure had taught me more than a few tragic lessons in this regard.)

It probably should have been, but wasn’t about the volatility of the Downtown Toledo real estate market during an economic recovery that remains shaky, and where the only ones still apparently making any money are the carpenters putting plywood up in the windows. This is is Toledo (“where you will do better”), where even experienced and savvy gamblers like Larry Dillin and the Chinese, playing their cards close to the vest, have feared to go ‘all in’ with what would normally appear to be winning hands in games like Southwyck or the Marina District.

It wasn’t even about the fact that even by using Common Core math principles (where 2 + 2 = 5 for some values of 2), the numbers never seemed to work out. Even if purchasing the property at a cost of $1, by the time the city completed a “property flip” on this facility that meet all of the current building codes and ADA requirements, it would likely exceed the existing current estimate of $7 million. Add in the consequences of Toledo’s liveable wage, the labor overruns that come with any government project and the inevitable yet-to-be-discovered costs that will only come to light when the project is too far along to turn back on, the real costs of Toledo’s “This Old House” fixer-upper may not only exceed the worst nightmare from this PBS show, but in a worst case scenario could conceivably approach the original $61 million construction cost.

But all of this can be set aside as not being the real reason that Toledo should not become a real estate agent and buy this building. That, in fact, was something that I only discovered late into my research.

As many of you know, government overreach is at an all time high in this nation, with bureaucratic encroachment at every level of government occurring against a largely disinterested electorate. Government in this nation is more powerful, more intrusive and more dangerous than it has even been in its history. The real reason, therefore, that the city should not be permitted this move is … the Blazers.

Government simply cannot be allowed to add to their already formidable arsenal of weapons, the power imbued in those hideously colored, horribly tacky real estate blazers. Equipped with these polyester stormtrooper uniforms, what chance has even an aroused citizenry against them?

Six years since Southwyck closed, but future of site still unclear

Fifty-eight acres in the wide open spaces of rural Northwest Ohio doesn’t seem like much. But picture that land along a bustling corridor of South Toledo and you have what seems like an abyss. A black hole. A void.

Photo by Shawn Rames / Exploring Northwest Ohio from the Sky

Any out-of-towner would quickly calculate, “Something used to be there.”

Something was indeed there, the once-grand Southwyck Mall. It has been six years since Southwyck closed its doors on June 29, 2008, and despite some hope for resurrection by two different developers – one far more serious than the other – no construction crews are visiting the ground anytime soon.

“We don’t own the land,” said Toledo City Councilman Rob Ludeman. “But we’d certainly work with a good developer there to make things happen.”

Glory days

Southwyck opened in August 1972 to great fanfare and immediate success. Its stores boomed with activity in the 1970s and ’80s, when indoor malls coast-to-coast enjoyed their peak of fame.

Southwyck was one of an eventual four malls in Toledo. A unique “Old Towne” expansion with cobblestone walkways brought a mini wing with even more retailers in the late 1970s, a portion that slowly morphed into part arcade during the newly born videovgame era of the 1980s. Southwyck even enjoyed the distinction of having the world’s first seven-plex movie theater.

The Y-shaped structure and its 100-foot skylight center dome evoked a spaceship design, almost implying a perpetual look to the future.

However, like so many businesses before, Southwyck’s window of growth and expansion eventually closed due to changing times, increased competition and perhaps most notably, lack of investment. Even still, the demise of the indoor mall was a trend everywhere, and numerous websites quietly linger as a virtual graveyard dedicated to “dead malls” nationwide.

Larry Dillin, president of Dillin Corp., and former commercial developer at Southwyck, acknowledges the property suffered for a long time.

“The mall area suffered from a lack of investment for a number of years, 20 years-plus,” Dillin said. “Franklin Park had continued new investment over time. At Southwyck, the owners didn’t do that, so the market kind of passed it by. It became a disinvestment, a downward spiral activity.”

Potential rebirth

Even before Southwyck’s doors closed, or the wrecking ball took to it in 2009, interest in reviving the site emerged.

Dillin already had Perrysburg’s Town Center at Levis Commons under his belt when he began planning a similar open-air arrangement for Southwyck in 2007-08.

“We always believed that the area could stand another Levis Commons design,” Dillin said, who relocated from Perrysburg to Austin, Texas. “But the tenant lineup would not be a Levis or Fallen Timbers or Franklin Park. Toledo can only have a couple of those national retailer concentrations with that kind of fashion merchandise. We would just have had a different tenant lineup. We had two anchor stores that were interested. We were going to significantly reduce the retail to half of what was there before and do more housing, and focus on a collection of restaurants.”

But even a child with a lemonade stand back then can remember what the economy started to do: mom and dad weren’t as willing to give their child juice to sell, the cost was rising and people were buying less lemonade.

“Basically the way I sum it up is a good idea with bad timing,” Dillin said. “We were working on Southwyck in 2007 and 2008, and we made really good progress. The retailers wanted to come back. But the banking environment fell apart in the spring of 2008.”

Ludeman represented Southwyck’s district at the time, and he remembers it all too well.

“I liked his proposal, but again the real estate market took a terrible downturn and he was not able to secure the investors, and that affected Levis Commons,” Ludeman said. “They went through some foreclosures, so he (Dillin) had to pull things back and walk away from Southwyck because there wasn’t enough development money out there for it to come to fruition. When times were good, times were good.”

It was hard to predict the magnitude of the downturn, and it made years of planning evaporate.

“Certainly you don’t go into these things without a plan,” Dillin said. “Part of the difference is public funding versus private funding. There really wasn’t any place to go for that kind of funding. The economic recession took hold and a lot of those retailers took to the sideline.”

Another less serious development was briefly pitched in 2012 by a Columbus group that would have turned the location into a massive sports recreation center. The plan fizzled fast due to unsettled financing and other concerns about the group’s legitimacy.

Current owners

The land remains in private hands, though it has always been for sale. According to Ludeman, the property is owned by three different parties: MD Management in Mission, Kansas, Dillard’s in Little Rock, Arkansas, and MGHerring Group in Dallas. Dillin offered that Dillard’s sold its portion to MGHerring, and that only two owners remain.

Calls to all three parties were either not returned, or offered no comment. Colliers International, which lists the property for the owners on their website, also offered no comment.

Other than an Internet listing, there has been a sign on the property, but little else is known about marketing of the 58.30 acres. The site is listed at $4,250,000, which equates to $72,900 per acre, a price some think could be high, but Dillin said might be on target.

“I wouldn’t believe it’s too high on a price per acre basis,” Dillin said. “You can’t just break off a two-acre piece and develop something and expect it to be successful. I did the lifestyle center and the apartments at almost the same time. With those two going up together it created a critical mass to give us momentum to continue going forward.”

“You hit the right price, and it may go,” Ludeman said.

Lisa Ward, spokesperson for Toledo Mayor D. Michael Collins, said the mayor’s office remains in contact with at least one of the owners, and “remains optimistic that economic development will take place at the Southwyck site.” He is hopeful something could still arise this year.

But it has been six years, and many wonder: Shouldn’t something have happened by now?

“The only thing you do have to recognize is that we’ve been though critical transformation,” Dillin said. “No one would have expected that banks would have run out of money. Banks stopped lending entirely. So that kind of lending still has not really come back. So from a national perspective, there’s that. Couple that with the fact that Toledo is a third-tier retail market. It’s not that [Toledo’s] bad, but they’re smaller.”

What’s next?

With private out-of-town owners, it leaves the city less in control than if it owned the land, but eager to help.

“Unfortunately there’s no concrete plans,” said Matt Sapara, director of the city’s department of development. “Until there’s different owners, I don’t expect much to change. I don’t know how actively they’re marketing it. I’ve heard all kinds of different stories but have never talked to them directly.”

“I’m not sure they get along well. There’s not a huge motivation to develop,” Ludeman said.

The city indicates it is trying to do its part and lay the welcome mat for any potential new development.

“I can tell you the city is dedicated to redeveloping,” Sapara said. “We’re doing all the things we can do to put things in a better position out there.”

The Reynolds Road corridor which borders the Southwyck property was redeveloped and landscaped, making it more appealing to businesses and shoppers. Southwyck Boulevard, which loops around the entire property and adjoins several office buildings, was totally rebuilt and repaved. In addition, City Council recently elected to tear down the old Clarion Hotel on Reynolds Road.

Combine these facts with, as Ludeman points out, senior living community Genesis Village’s redevelopment faring well, and the At Home superstore moving into the former Kmart store, many contend the Southwyck site is groomed for a return to its prime.

“Everything is ready to go except for finding the right investor and getting moving,” Ludeman said. “You put these things together and developers take note.”

For now, the rumor mill continues to swirl.

“There have been rumblings recently about interest on the Southwyck site,” Ludeman said. “I don’t have any concrete information. The rumblings are that it’s probably not retail, probably more business oriented, which would probably blend in nicely with the buildings along Southwyck Boulevard. Those rumblings are encouraging to me, but I don’t have any specifics.

You could put a decent sized development there. Clean manufacturing use or a business park situation may be more obtainable than a large retail operation, or a blend of retail and business commercial.”

Dillin acknowledges that indoor malls are not the trend, and still believes his original outdoor lifestyle concept is the best solution.

“That concept can appropriately work at Southwyck,” Dillin said. “It’s going to take someone with enough moxie to go back and implement that vision. Certainly you can look across the country and there are very few new [enclosed] malls that are being constructed. Some malls are being ‘de-malled’ and made into an open area lifestyle center. You have to look at national trends and your answer is there.”

It’s difficult to argue Southwyck’s still relevant and strategic location, situated near the Ohio Turnpike, I-475, Airport Highway’s commercial area, all with a surrounding heavy residential mix. Dillin insists that “it’s an important site, in an important section of town.”

As a former District 2 Toledo City Councilman, Collins is of the same mind, saying Southwyck is a property “located in a key area that will be developed in time by investors willing to make use of the locations.”

“I think it’s potentially a good location and with new investment, because new investment brings more investment,” Dillin said. “There’s no reason why a new property would not be successful.”

“I think it’s potentially a good location and with new investment, because new investment brings more investment,” Dillin said. “There’s no reason why a new property would not be successful.”

Although Dillin has washed his hands of the project, would the possibility exist that he might explore it again?

“If the world changed, but it’s difficult now with the banking climate the way it is,” Dillin said. “It’s a project I’ve always liked. It was a good project in its day, and some good, quality investment should go in its place.”